Speech to Local Government New Zealand

Early in my time as an MP I went for a long walk on a windswept Kare Kare beach with Waitakere mayor Bob Harvey. We talked for about four hours of our hopes and dreams for the future.

I was enthused by his vision of transforming a part of Auckland wrongly known for

poverty, crime and drag racing, into an Eco City where celebrating nature, diversity and

the arts would go hand in hand with positive economic development in value added

industries like marine construction and film-making.

Together with a broad range of community stakeholders, we got to work.

We protected the unique bush environment of the Ranges from "death by a thousand cuts" and created the Waitakere Ranges Heritage Area.

Waitakere boosted cultural activities like the Moon Festival, and built community capital through a rich network of community organisations.

And we pioneered and co-funded a comprehensive urban renewal plan for New Lynn that has become a model for integrated transport and modern housing solutions.

To get that across the line I had to face down the short sighted views of Treasury officials who could not see the broader economic and social benefits of that central-local government partnership.

We won, investment flowed, new rail lines and a first rate transport interchange were built, major housing and commercial developments followed, and New Lynn has been transformed into one of the coolest, most diverse, up and coming urban villages in Auckland.

None of that happened by accident.

It required a broad vision for local government across all four of its well-beings: economic, social, environmental and cultural.

It required real guts to reach into the future and do whatever it took to make it happen.

And it required real investment - roughly evenly split across Central and Local Government, and with private sector co-investment - of around $300 million dollars to get it rocking.

That investment in new partnership will pay handsome dividends for generations to come.

Vision

You see, I believe New Zealand should be the fairest, most decent society in the world.

We’re a small nation with a lot of resources. We have a culture of working hard and looking after each other. A fair go for everyone, and putting people first.

We’re a nation founded on the idea that everyone, no matter where they came from, poor or rich, city or country, older or younger, new New Zealander or Kiwi of many generations, that each and every one of us would have the opportunities to get ahead and make the most of our lives.

My vision for New Zealand is that we regain that sense of community.

Working together

And that we do this work together, government, local government, community, businesses, to achieve real gains as a nation. Gains that are shared fairly and used to ensure that our children and our grandchildren have the opportunities they need.

That’s because we know that the most effective decisions are made when government works with people, not just for them.

I’ve seen first-hand the contribution that community development can make in building a resilient community.

The problem

But in the last few years I've also seen the steady erosion of opportunity and wealth in much of New Zealand. In region after region I've visited towns where major employers are downsizing or closing, a boat-builder in Northland, a timber mill in Rotorua, another two in South Otago, a heavy engineering firm in Taranaki, another in Dunedin…

And this is self-perpetuating – when young and talented New Zealanders leave to pursue opportunities that are no longer available in their own regions, they take with them the skills and energy needed to build for the next generation.

It's happening because right now we’ve got a situation where the regions have been neglected. More and more central government is pushing councils and authorities away from the four well-beings and toward a "rates, rats, and rubbish" version of local government.

A version that leaves less and less space for local government and communities to guide their own futures, to do their very best by each other.

Increasingly, New Zealand’s economy is split between Canterbury, which is growing quickly buoyed by the rebuild, the main centres where there is moderate growth, and the regions, which whose economies are stagnant or going backwards.

In 2013, regional GDP per capita fell in a majority of the regions.

Regional centres are losing their manufacturers and, with them, the skilled, well-paying jobs that underpin the local economy.

The wood processing and manufacturing sector, for example, has lost 3,000 jobs since 2008.

The statistics show that the regions are suffering under the current government.

There are more jobless New Zealanders compared to December 2008 in every region of the country save Canterbury.

In 13 out of 16 regions, real median weekly income has fallen since 2008. The number of youth without jobs and not in education or training has risen in 14 regions under the current government.

It’s got to the point where the Royal Society is warning of red-zones and abandoning towns.

Labour does not accept that future.

How we fix it, and why

I want - Labour wants – for every New Zealander to have a decent education, to have a good well-paid job, raise a family, to have the opportunity to own a home, and to know that they live in a society that will give their kids that chance too.

Part of that needs to be about getting the right macroeconomic settings in place. And Labour’s economic upgrade policies are designed to do that.

Our monetary policy will drive savings and investment capital, and support our exporters by reducing the dollar.

Our industry economic upgrades back sectors such as manufacturing and wood processing to shift from volume to value with incentives to drive innovation and investment in plant and machinery.

However not all the solutions are to be found at the national level. If we are to build wealth and create good jobs we need regional solutions.

Working with, not just for

But we won’t intervene from on high. Labour’s approach to regional development will be about getting involved and working alongside communities. It is based on the certainty that not all the best ideas come from Wellington.

In our new networked world we can build on great ideas wherever they spring up. We can empower citizens and realise potential by getting alongside them and backing their ideas.

It’s about working with New Zealanders, not just working for them.

By contrast, the current government is very much about being hands-off in terms of the support it offers. But it is also top down in terms of decision making.

Labour knows that there are things central government can bring to the table. We’re in a better position than most to take a long and broad view of economic gains.

Central government isn’t, and shouldn’t be, bound by quarter by quarter returns – it should be focused on making investment decisions on long-term timescales and on broad economic impact.

Labour in Government will pursue a partnership with local governments that is genuine, enduring and meaningful. We will work with Local Government New Zealand and other stakeholders to achieve this through a more cooperative model.

We will begin by constituting regular forums between Cabinet and Local Government New Zealand to create a shared vision for a genuine and enduring partnership. We will also constitute regular forums between central and local government CEOs to sustain best practice and develop a cooperating model that delivers.

Labour will commit to entrenching the independent role, purpose and functions of Local Governments as partners in community development and nation-building in our Constitution Act and other legislations.

We will establish a clear set of agreed principles to govern the relationship between the two spheres of government. Agreements will outline expectations, legitimacy and a sustainable basis for negotiating shared vision, goals, and outcomes that delivers on a collective vision for New Zealand by developing and strengthening communities, districts, cities and our regions.

We’re not interested in being white knights riding into town from capitol city to tell you what to do.

What we are interested in is making sure that the economic potential in New Zealand’s regions is unlocked. That’s absolutely critical to making sure New Zealand’s economy prospers. It’s why I’ve taken the regional development portfolio in our party, and it’s why I’m announcing our regional development policy today.

Regional growth plans

Labour will work in partnership with each region to develop a Regional Growth Plan.

These plans will identify the opportunities and barriers to growth, as well as practical measures to create a step-change for each region’s economy.

These Regional Growth plans will not just be more strategy documents to gather dust on the shelf; Labour is going to back these plans by investing in infrastructure and by investing in our people.

We also understand that every region has its own strengths - unlike the current government we do not believe the one-size-fits-all answer for everyone is more dairy cows and more oil exploration.

Like I said, Labour is fundamentally about taking the long-view. We understand that the kinds of projects and infrastructure required to generate ongoing and sustainable wealth in the regions shouldn’t stand or fall on whether they can turn a quick buck or not.

Closing the equity gap

I don’t think there’s anyone in this room who doesn’t know of at least one project that would help grow their regions wealth, but that can’t get across the line because of a lack of available investment.

In my time as regional development spokesperson I’ve seen more than a few. They’re ideas like the Opotiki harbour development which would create nearly 300 jobs – in a town with twice the national rate of people on the benefit. And the tragic events of recent weeks indicate the importance of creating jobs in communities like that.

Or ideas like the Gisborne to Napier Rail line which could be crucial for the efficient processing of East Coast timber and providing a sustainable future - a back bone to the east coast.

Or rebuilding Dunedin’s heavy engineering, or accelerating its knowledge industries in the wake of years of the current government’s neglect.

Good ideas that will have community-wide economic benefits, but that face a basic equity gap – that simply can’t get the cornerstone investment they need.

Indeed it’s been happening for so long that many good ideas don’t even make it to a business case because they won’t get backing no matter how well they stack up.

If we want to grow the regions and unlock their economic potential. If we want to breathe life back into our neglected cities and towns, and ensure our kids can get a great education and a decent job in the communities they grew up in, then we need to put money into creating those opportunities.

The Regional Development Fund

That's why I am announcing today an initial commitment of at least $200m over our first four years of government to a fund that will drive cornerstone growth projects in our regions.

Labour wants to see the Regional Development Fund enable step changes in regional economies by undertaking substantial investments in major pieces of infrastructure and manufacturing operations.

The Fund will operate within a rigorous strategic framework in partnership with local stakeholders.

Qualifying projects must make a real difference to implementing real regional growth plans, rather than being spread too thinly.

This will normally involve making better use of a regions resources and/or taking leading sectors to the next level.

Projects must have a measurable economic and social return, have a clear and documented rationale, and compliment rather that crowd out private sector investment (such as capturing spill-overs that are not otherwise available).

The Fund will be managed by an independent panel of experts in regional development drawn from local government, business, and iwi. It will use clear criteria for deciding which projects receive backing.

They will need some local funding, whether from business, local government, or iwi to go with the fund’s investment. The fund will only invest in projects that locals are also willing to put money into.

They will ultimately need to be able to stand on their own merit without further government backing, but we’ll be taking a long-view on that. Structural economic change doesn’t happen overnight.

We’re looking for projects that drive step-change for the local economy, in terms of boosting the value of the region’s economic output, not just its volume.

That might be through increasing the sophistication of manufacturing products and processes, or lowering costs by improving infrastructure and transport link.

Most of all, the projects we back will have to create secure well-paid jobs.

Our previously announced policies backing manufacturing and the wood sector with government procurement and tax breaks for investments, and the other elements in the package we’re announcing today such as our National Ports Strategy, will combine with our fund to ensure the regions thrive.

New Zealand is wonderful and diverse nation with so much potential. And so much of that potential is locked up in our regions.

But it has been neglected for too long. That’s no good for anyone – we will not have a strong and productive economy until we have strong and productive regions.

Today I’ve outlined Labour’s central regional development policy, but many of our other policies will also help bring prosperity to regional New Zealand.

Labour knows that if we are to put people first, if we are to ensure that all Kiwis can have a decent job, a warm, dry home, and be able to afford to raise a family – no matter where in New Zealand they live - then we need to get the economic settings right.

And that – by definition – must be a shared journey. We are all in this together.

Labour has a vision for a high value, sustainable future with better jobs and higher wages.

We will make a positive difference by upgrading our economy, by revitalising regional economies, so we can build the society New Zealand and New Zealanders deserve.